Ranbaxy Laboratories sold the exclusive development and global marketing rights of ciprofloxacin formulation to Bayer AG of Germany. Ciprofloxacin formulation developed by Ranbaxy is an oral once-a-day anti-infective. Industry experts feel the deal is a breakthrough for the Indian pharmaceutical industry which has the backing of a pool of highly competitive skilled manpower.
Ranbaxy's new licensing and royalty-fee deal with Bayer is likely to be followed up by others in the Indian pharmaceutical industry. Many Indian companies may keep this as a model to get into the research-based growth path. Indian companies can take the benefits of existing cost effective new drug delivery systems.
Industry sources say that Indian companies already have infrastructure and competitiveness for new drug development. What was lacking was the acceptance of the same with international industry majors. With announcement of the deal between Ranbaxy and Bayer, the credibility part for the Indian industry is taken care of. Now International drug firms are likely to tap Indian companies for drug development related work because of the in built cost advantages. The deal also will give Indian companies a sound basis to negotiate with international firms.
Ranbaxy has retained the marketing rights for the product in India and CIS. Both the companies have also agreed to co-market and co-promote the product in certain markets. Bayer is market leader for ciprofloxacin in the international market. The company recorded sales of DM 2.5 billion for its brand Cipro in the year 1998 and is available in 100 countries. With cipro going off-patent soon, a lower dosage form is really the next best thing to extending patent life.
In the Rs 300-crore Indian market for ciprofloxacin formulations, Ranbaxy is a market leader. Even though technically Ranbaxy can launch the product in India at any point after local approvals, it is unlikely to do it before Bayer does so internationally.
Ranbaxy has developed a molecule to treat enlarged prostates which would require several years of cost-intensive clinical trials. Even when the company is in the process of completing phase I clinical trails on its own, it is reportedly thinking of licensing its molecule for phase II. Licensing of products developed by the company to international big names in the drug industry, industry observers feel, is part of a well thought out long term
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